Welch on Grain: Corn Remains 70% Good to Excellent

    Market Situation

    Crop Report. The crop condition index for U.S. corn has stabilized at 375 points, 15 points above average. Since early July, about 70% of the crop has been rated good and excellent, 10% very poor and poor. Corn harvested as of Sunday is 59% compared to a five-year average of 54%; 98% is considered mature.

    Grain sorghum nationally is 61% harvested compared to a 52% average. Of the major producing states, Texas is at a near normal harvest pace of 74% while Kansas is 52% harvested compared to 35% normal.

    Crop Acreage Data. The Farm Service Agency released updated crop acreage numbers last Wednesday. FSA reports corn acres planted, failed, or prevented from being planted of 87.172 million, up about half a million acres from the September report. In the October WASDE, USDA reported 88.4 million corn acres, down about half a million from September. With these revisions, FSA and USDA corn acreage numbers are near their normal relationship. The long term ratio of USDA to FSA is about 101.5%.

    Grain Use. Reports related to feed grain use were mixed last week. The ethanol production number from the Energy Information Administration on Wednesday morning showed continued growth: 107% of last year and 111% of average for the week.

    The Broiler Hatchery report showed broiler chicks placed down 4% compared to a year ago and down 3% compared to average. Weekly placements of 156.127 million were the lowest since 154.617 million on November 7, 2013.

    Export sales commitments for both corn and grain sorghum were below the pace necessary to reach the end of marketing year targets.

    Outside Markets. The Consumer Price Index for September released by the Bureau of Labor Statistics shows overall inflation remains flat in 2015. BLS cites lower gasoline prices as the major contributor to the stable price situation. Food prices are up 1.6% compared to September 2014, down from 3.2% price increases at the beginning of the year.

    The National Bureau of Statistics reported today that China’s economic growth in the third quarter was 6.9%, down from 7.0% in the second quarter but above 6.8% forecast by analysts. The Federal Reserve cited volatility in China’s financial markets as an offset to increased growth measures in the U.S. in its timing of an increase in interest rates.

    Marketing Strategies

    2015 Corn Marketing Plan. I have completed all my pre-harvest sales of the 2015 crop and have 20% remaining to price at harvest, which should be wrapped up this week. As of today’s close, having a marketing plan has added about 6% to corn revenue compared to pricing it all at harvest.

    Upcoming Reports/Events.
    October 23 – Cattle on Feed
    November 10 – Crop Production; WASDE; Short-term Energy Outlook
    January 10-16 – TEPAP (The Executive Program for Agricultural Producers), Unit I is full but space remains for Unit II, here
    January 20-March 3 – Master Marketer, Abilene, Texas. Registration is now open, here

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